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The creator economy is one of the fastest-growing industries in the world. The number of creators grew from 50 million in 2020 to 200 million today. Not to mention the increase of platforms and tools for every step of the creator work cycle, and the millions of dollars poured in by investors.
In this article, we’ll cover everything you need to know about the creator economy:
- How big is the creator economy
- What are creators and how they make money
- Top creator economy startups and how they find creators
- Funding in the creator space
So whether you’re a creator looking for guidance, a founder looking for opportunities, or an investor looking to go to the moon, this article will give you all the information you need to get a clear understanding of the creator economy.
Brief creator economy history
Creators have always been here, what changed these past 20 years is the evolution of the internet and the birth of social media platforms like YouTube, Instagram, TikTok, Twitter, etc.
They set a stage where creators can share their own content, build their own personal brands, and earn money from their creations.
Technology has also made creating content much easier, faster computers, better cameras on phones, lightning-fast wifi, etc. enabling creators to express themselves in their creative endeavors freely.
All of this and the rising idea of doing what you love for a living led to the boom of the creator economy.
As the number of creators rises, so does the demand for tools and services to help their needs and fix their problems. Platforms like Patreon and YouTube bring life to the creator economy. Without them, creators wouldn’t be able to create, and without creators, these platforms wouldn’t be able to exist.
How big is the creator economy?
Currently, there are around 200 million creators. Out of the 200M creators, 66% consider themselves part-time creators, and 34% are considered full-time professionals.
They plus the platforms that support them, and the tools they use to create content make up the entire creator economy.
The creator economy market size, it’s estimated to be worth $104.2 billion currently. Its growth was accelerated during the global Pandemic. It hasn’t slowed down since and it isn’t expected to any time soon.
Social Media Platforms
Social media platforms have the creator space its start. They enable creators to share their content with the world. Using algorithms these platforms distribute content to relevant people and help creators become social media influencers and create and grow an audience.
These platforms are the base on which creators exist. Without them, creators and influencers, as we know them today, would not exist.
As you might have guessed these platforms mainly include but are not limited to social media:
- Video and streaming platforms: YouTube, Twitch.tv, TikTok, Instagram, Facebook Live
- Photography and image-based platforms: Instagram, Snapchat, Artstation, Behance, CG Society, Deviant Art
- Music and podcasting platforms: Soundcloud, Spotify, Itunes, YouTube
- Writing: Twitter, Quora, Medium
YouTube has the biggest incentive for top creators because of the YouTube Partner program. No surprise since YouTube was the platform that originally started the creator economy, and popularized the word “creator”. It still remains the biggest creator platform.
What are creators?
A simple definition: A creator is someone who creates content and earns money by doing so. Although only a small percentage of the 200 million creators out there earn a livable income from their content.
Creators embrace all kinds of content, but most commonly videos, audio, podcasts, art, graphics, and animation.
Creators that succeed are incredible at what they do, they need to be better than the rest. And to do that they have to be relentless hustlers, good marketers, and extremely passionate about their craft.
How many creators are there?
As I mentioned before, currently the creator economy consists of 200 million creators. Now let’s start with the full breakdown:
- 66% of creators consider themselves part-time creators
- 34% of creators consider themselves full-time creators
- 36% of creators started their journey 1 year ago or less
Types of creators
Other than defining creators by their follower count and how much time they spend on content creation, there are two categories of creators based on the type of content they make.
They’re social media creators, content creators, video creators, and audio creators.
Social media creators are the most diverse type of creators. They’re on every platform and create multiple content formats: guides, videos, images, reviews, etc. They’re also diverse in their niche, with the dominant ones being beauty, fitness, fashion and gaming,
Content creators are those who produce written content, either specializing in one type of content (e.g. website copy) or writing in multiple styles and formats. They often repurpose their content for different platforms and are expert writers.
Video creators vary in the way they approach content since videos can be interesting on any topic if done right. Most commonly, these creators are YouTubers, but with the rise of short-form video and platforms like Tiktok, Instagram Reels and Patreon, video creators are more diverse than ever.
The number of audio creators has grown exponentially these past few years. Currently, there are over 2 million podcasts worldwide, and the number of listeners increases by 16% year over year. We’ll definitely be seeing more of this type of creator in the future.
How do creators make money?
Out of the 200 million creators, only 4 million are considered to be professional. Meaning that they are full-time creators, and make a living off of their content.
Monetization has proven to be tricky for many creators, with many struggling to make content creation their main source of income.
- Only 6% of beginners have earned more than $10k annually, with 59% not monetizing at all, and 35% earning less than what is considered a livable income.
- Only 12% of full-time creators and 3% of part-time creators make more than $50k annually, with with 46% of full-time creators and 68% of part-time creators earning less than $1k annually.
Full-time and part-time creators alike generate their income through a variety of methods:
- Ad revenue
- Subscriptions for exclusive content
- Selling courses
- Influencer marketing
- Affiliate marketing
- Donations from fans via donation platforms
The reason why creators are so diverse with the methods they use is to scale and secure their income.
For example, if a creator solely relied on YouTube Adsense revenue, and YouTube decided to demonetize their account then they would be left with nothing.
So creating multiple income streams is the only way creators can secure their way of life.
Fortunately, there are a ton of companies that have been built to help creators on their journey and allow them to make a full-time income.
Creators earning income through ad revenue was first introduced in the early days of YouTube. Although to earn a considerable amount of money through ads alone is very hard.
Most creators don’t even make enough money to reach the U.S poverty line of $12 an hour. The biggest earners here are the 1% of creators who have been at it for a very long time and have accumulated very large audiences.
Depending on the viewers’ location and the target audience, YouTubers receive $0.5 to $6 per 100 views on their videos. And keep in mind that YouTube pays for the number of people that watch ads on your channel and not the general number of views.
Donation platforms and exclusive content
Donation and patronage platforms took the creator economy by storm when they first showed up. Through these platforms, creators can directly depend on the support of their fans by collecting donations and tips.
Some of these platforms have a subscription-based model where fans can choose to be monthly subscribers and actively contribute to their creator. Creators create exclusive content on these platforms as a way to incentivize their community to join.
Merch and Products
Creators sell items, most commonly clothing, with their own designs unique to their personal brands. They then use third-party companies to hand the production and shipping.
Creators in different niches sell different products, in the beauty community, for example, creators sell makeup products. While in the fitness industry creators market their own supplements or workout accessories.
Course selling and webinars
Creating and selling online courses is another way that creators use to make money. This method is used mostly by creators that have valuable skills such as painting, cooking, producing music, etc.
Skillshare is the most popular platform for course selling amongst creators. In fact, Skillshare’s entire marketing strategy was based on targeting creators and getting them to join their platform and create a course.
Creator economy startups
There are over 300 creator-focused startups out there all aimed to help creators. They include:
- Content creation tools,
- Management & operations tools,
- Community management tools,
- Off-platform monetization tools,
- On-platform monetization tools.
These platforms are the heart of the creator economy, and there are at least a few for every step of the creator work cycle. Check out our creator economy market map with all the tools in the space.
Top creator economy startups for 2023
The top creator economy startups for 2023 vary from membership platforms and fan monetization to financial tools and merch creation:
1. Beacons – Link-in-bio tool
2. Pearpop – creator marketplace for collaboration
3. Pietra – merch creation & distibution
4. Buy me a Coffee – fan monetization
5. Fanhouse – membership platform
6. Stir – financial management
7. Karat – financial management & credit card for creators
8. Kajabi – platform for selling courses & classes
9. Patreon – membership platform
10. OnlyFans – membership platform
How we help startups find creators
For the past three years, we have been the go-to sales intelligence tool for the creator economy, helping startups find creators at scale and quickly grow their platforms.
Our narrow focus has enabled us to work with some amazing companies like Linktree, Willa, PearPop, Spring, Vayner Media, Mavrck Attentive Mobile, Laylo, Pietra and so much more.
We own the largest social media creator database on the Internet, and our most powerful feature is the ability to filter our lists, and target creators based on their location, gender and age, category, and most importantly by keywords in their bio.
Not only data from their primary platform but also what other platforms they’re using, whether are they monetizing or not, do they have a store or not, etc.
This way, you will receive a list of targeted emails and data that will enable you to personalize your approach and quickly onboard hundreds of creators on your platform, which will bring you great success in your outreach.
If you are looking to outsource the creator acquisition via outbound email we have an entire team of 35+ people that have been doing that for a while now.
Take a look at our Partnership program and click here to schedule a free call.
Funding in the creator economy
The creator economy has seen an incredible increase in funding and investors in the past couple of years.
According to CB insights, VC funding deals have skyrocketed since 2019. And it seems investors are placing their bets on a small number of companies that survived and thrived during the pandemic.
But with the upcoming global recession, funding has slowed down since Q4 of 2021, declining drastically in Q1 and Q2 of 2022.
Top creator economy investors
Here are some of the most notable and biggest investors in the creator economy. For the full list of investors and VCs, you can check out this blog.
- SignalFire – investments in Superdao, Karat, Clubhouse, RedCircle, Flymachine, Truffle.
- Intonation Ventures – investments in Stadium Live, Monet, Pipeline, Gamerjibe, Astro, Agape.
- Andreessen Horowitz – investments in Clubhouse, Substack, Pietra, Rally, Maven, Roblox, Teespring, Facebook, Pinterest, Robinhood, Coinbase, Luma, E-pal, Orbi, Stripe, Whatnot, Yield Guild.
- Tiger Global – investments in Kajabi, Patreon, Circle, Koo, Air, Livepeer, Coinbase, Roblox, Clubhouse.
- Next 10 Ventures – investments in Stir, SuperBam, Podcorn, Influence.co, Kollyde, Koji, Camera IQ, Trash.
- Index Ventures – investments in Gather, Fanbase, Discord, Patreon, Dubsmash, Creative Juice, Sanlo, Figma, Etsy, Rec Room, Robinhood, Roblox.
- Chapter One – investments in Cameo, Maven, Pearpop, Fanhouse, Circle Dapper Labs.
Creator economy trends
As the creator space evolves year after year, new trends emerge that define the current generation of creators and startups.
Spotting these trends in their early stage is beneficial for making decisions when it comes to direction, content production and monetizing for creators, and product development, creator acquisition and revenue management for startups.
The most impactful trends we’ve seen in today’s creators are creating a multi-platform presence, community building, becoming founders, and dalmatian of influencer marketing.
Funny enough, these characteristics define not just creators but a whole generation – Gen Z.
They understand the security of having a loyal community to lean on, the importance of diversifying to multiple platforms to increase their presence and revenue streams, and thus, gaining the knowledge and skills to become founders and advise brands on their influencer campaigns.
Creating a multi-platform presence
Most creators nowadays use multiple platforms to nurture their following and secure their social presence. One creator may have a YouTube channel, an Instagram page, a Twitter page, a Patreon community, and so on.
There are two reasons for this trend. The main reason influencers are spreading their presence across different platforms is because they want to secure their income, and create new income streams.
Let’s take Jeff for example. Jeff started out as a YouTuber, spent 5 years working hard and building up a following, and is now making a full-time income from creating content. YouTube suddenly decides to update their terms of service, and demonetize Jeff.
Jeff loses that income stream. But luckily he has an Instagram account and a Patreon community. Now even though he doesn’t make money from YouTube Adsense, his patreons still support him and he can sell his merch on his Instagram.
Creators needed a way to interact with their community, and so Discord came in with the answer. Nowadays almost every creator has their own Discord server where they can directly interact with their community.
Creators becoming founders
More and more creators that reach a high level of success find themselves opening businesses as a way to scale their personal brands as creators.
Most of the time these businesses include retail product lines and clothing brands.
Creators and influencer marketing
More and more brands are seeing the power that creators have. The global influencer marketing market is expected to reach $16.4 billion in 2022.
Influencer marketing is more cost-effective than traditional marketing, and it makes perfect sense ROI-wise.
Instead of spending thousands of dollars on equipment, actors, photographers and videographers, venues, etc. brands can utilize creators to boost their marketing efforts while spending 10x less and getting 10x more in return.
Creator economy startup trends
We spotted trends amongst the emerging startups in the creator economy. These startups offer help for the main pain points creators face currently: monetization, content distribution, and management.
Since monetization is the key pain point of today’s creators, startups are developing tools to make this aspect easier, whether through recurring revenue like fan monetization or one-time tips.
With creators diversifying their content to multiple platforms and formats, maintaining an online presence can get challenging. So startups that focus on convenience in content distribution are getting more and more appealing to creators (and to investors too).
Managing day-to-day activities and operating as a business while focusing on creating valuable content is a big struggle for creators. It’s no surprise they embraced these types of platforms as they can focus less on the back-end of the business without sacrificing it.
Let’s wrap it up
The creator economy exploded ever since COVID first started, with everyone being stuck at home it opened opportunities for people to follow what they love and start creating. And it doesn’t look like it’s stopping anytime soon.
As it continues to grow it inspires new creators to follow their passions and start creating. The need for new and innovative startups will continue to rise and create opportunities for founders, investors, and most importantly, for creators.